Tag Archives: cryptocurrencies

Now get your paycheck deposited into Coinbase

By Prakash Hariramani, Sr Director, Product, Coinbase

Over the next few weeks, we’re rolling out the ability for customers in the US to deposit their paycheck into Coinbase to more easily make regular crypto trades, spend on Coinbase Card, earn crypto rewards¹, and more. Get paid in crypto² or in US dollars and deposit as much³ or as little of your paycheck as you want. The future of payroll is coming.

Get easy and zero-fee access to crypto

There are many reasons why customers make frequent transfers into Coinbase: to make short or long-term investments, to earn interest on yield-generating assets, and to fund everyday purchases with Coinbase Card. However, customers tell us that making frequent transfers is time-consuming and inconvenient.

Now, you’ll save time on the extra steps it takes to move money so you can immediately earn interest on your income or earn crypto rewards with your Coinbase Card. Plus, you’ll pay zero transaction fees on direct deposit funds⁴ so you have instant and free access to the cryptoeconomy.

Maintain full control

Stay in control of your money by depositing as little or as much of your paycheck as you want. Get paid in any of the 100+ crypto available on Coinbase or in US Dollars. Choose to get paid in crypto so you can make recurring buys or earn interest on your income (by getting paid in USDC, DAI, or other interest-yielding assets), or choose to get paid in US Dollars to be ready for any trade or to spend with your Coinbase Card.

Set up just once

You can set up direct deposit in just a few steps without leaving the Coinbase app. Tap direct deposit in the settings, follow the instructions, and find your current payroll company or employer, and we’ll automatically update your paycheck allocation. If you’d prefer to set up direct deposit manually, we’ll provide instructions on what to share with your HR department or employer payroll website. You can modify your direct deposit preferences at any time within your Settings.

Enter the future of payroll

As you begin to do more with your crypto from staking to spending to sending, we’re also making it easier for businesses to pay their employees in crypto. We’ve partnered with a number of companies, including Fortress Investment Group, M31 Capital, Nansen, and SuperRare Labs, to allow employees throughout the creator economy and financial services to enter the future of payroll.

Stay tuned for announcements in the coming months as we make it easier for more businesses to pay employees in crypto.

¹Crypto rewards is an optional offer.

²If you choose to be paid in crypto, Coinbase will automatically convert your paycheck from US dollars to crypto with no transaction fees.

³Limits apply, see terms.

No Coinbase transaction fees but a spread applies when we buy, sell, or trade cryptocurrencies. Other standard fees may apply, and will be shared during Coinbase Card sign-up.

The Coinbase Card is issued by MetaBank®, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. The Coinbase Card is powered by Marqeta.

Turkey Bans Cryptocurrencies for Payments

Turkey’s central bank (CBRT) in a surprising move, banned the use of all cryptocurrencies and digital assets to payments for services and goods, citing possible damage and significant transaction risks.

CBRT said that digital assets based on distributed ledger technology (DLT) could not be used, directly or indirectly, as an instrument of payment in any business in Turkey.

Turkey’s Central Bank said that the cryptocurrencies prohibition had been introduced because digital assets are not regulated or supervised, their prices are very volatile, electronic wallets can be stolen and might be used in illegal transactions. Turkish watchdog has long pointed to cryptocurrencies use in illegal activities as a reason to be cautious on any exposure in the crypto industry.

Bitcoin and cryptocurrencies penetration in Turkey is very high. Turkish investors turn to digital assets such as Bitcoin and Ethereum and run away from the troubled Turkish lira (TRY) as they are looking for a hedge against the rising inflation in the country.

Bitcoin is under heavy selling pressure after the news and as of writing, BTCUSD is 4.43% lower at $60490 while Ethereum (ETHUSD) is 5.31% lower at $2370.

Meanwhile the USDTRY is trading 0.53% higher at 8.062 close to monthly lows for the pair.

UNICEF launches Cryptocurrency Fund

UN Children’s agency becomes first UN Organization to hold and make transactions in cryptocurrency

UNICEF will now be able to receive, hold and disburse donations of cryptocurrencies ether and bitcoin, through its newly-established UNICEF Cryptocurrency Fund. In a first for United Nations organizations, UNICEF will use cryptocurrencies to fund open source technology benefiting children and young people around the world. 

Under the structure of the UNICEF Cryptocurrency Fund, contributions will be held in their cryptocurrency of contribution, and granted out in the same cryptocurrency.     

“This is a new and exciting venture for UNICEF,” said Henrietta Fore, UNICEF Executive Director. “If digital economies and currencies have the potential to shape the lives of coming generations, it is important that we explore the opportunities they offer. That’s why the creation of our Cryptocurrency Fund is a significant and welcome step forward in humanitarian and development work.”

The first contributions to the UNICEF Cryptocurrency Fund will be received from the Ethereum Foundation and will benefit three grantees of the UNICEF Innovation Fund – and a project coordinated by the GIGA initiative to connect schools across the world to the internet.

“The Ethereum Foundation is excited to demonstrate the power of what Ethereum and blockchain technology can do for communities around the world. Together with UNICEF, we’re taking action with the Cryptofund to improve access to basic needs, rights, and resources,” said Aya Miyaguchi, Executive Director of the Ethereum Foundation. “We aim to support the research and development of the Ethereum platform, and to grow the community of those that benefit from a technology that will better countless lives and industries in the years to come. We’d like to thank UNICEF and the UNICEF family of national committees for their leadership as we create real progress together.”

The Ethereum Foundation will make its initial donation through the French National Committee for UNICEF.

UNICEF national committees of USA, Australia and New Zealand also accept cryptocurrency.

The launch of the UNICEF Cryptocurrency Fund is part of UNICEF’s ongoing work with blockchain technology. UNICEF co-leads the UN Innovation Network with WFP. The network is responsible for researching the potential and pitfalls of blockchain and other emerging technologies. 

FCA warns that younger investors are taking on big financial risks

The Financial Conduct Authority (FCA) has published research findings into better understanding investors who engage in high-risk investments like cryptocurrencies and foreign exchange.

The findings reveal there is a new, younger, more diverse group of consumers getting involved in higher risk investments, potentially prompted in part by the accessibility offered by new investment apps. However, there is evidence that these higher risk products may not always be suitable for these consumers’ needs as nearly two thirds (59%) claim that a significant investment loss would have a fundamental impact on their current or future lifestyle.

The research found that for many investors, emotions and feelings such as enjoying the thrill of investing, and social factors like the status that comes from a sense of ownership in the companies they invest in, were key reasons behind their decisions to invest. This is particularly true for those investing in high-risk products for whom the challenge, competition and novelty are more important than conventional, more functional reasons for investing like wanting to make their money work harder or save for their retirement. 38% of those surveyed did not list a single functional reason for investing in their top 3.

Sheldon Mills, Executive Director, Consumer and Competition at the FCA said: ‘Much of the consumer investments market meets consumers’ needs. But we are worried that some investors are being tempted – often through online adverts or high-pressure sales tactics – into buying higher-risk products that are very unlikely to be suitable for them.

‘This research has helped us better understand what drives and motivates consumers so we can tell them about the risks involved in these investments through our investment harm campaign.

‘We want to make sure that we encourage the ability to save and invest for lifetime events, particularly for younger generations, but it is imperative that consumers do so with savings and investment products that have a suitable level of risk for their needs. Investors need to be mindful of their overall risk appetite, diversifying their investments and only investing money they can afford to lose in high risk products.

‘We also hope our research will provide valuable insights for other organisations that are involved in tackling harm in this market.’

The research shows that investors often have high confidence and claimed knowledge. However, it also shows a lack of awareness and/or belief in the risks of investing, with over 4 in 10 not viewing ‘losing some money’ as one of the risks of investing, even though as with most investments their whole capital is at risk. In some cases, investors can lose more than they initially invested for example with contract for difference investments. These investors also have a strong reliance on gut instinct and rules of thumb, with almost four in five (78%) agreeing “I trust my instincts to tell me when it’s time to buy and to sell” and 78% also agreeing “There are certain investment types, sectors or companies I consider a ‘safe bet’”.

Research findings indicate that this newer audience has a more diverse set of characteristics than traditional investors. They tend to skew more towards being female, under 40 and from a BAME background. This newer group of self-investors are more reliant on contemporary media (e.g. YouTube, social media) for tips and news. This trend appears to be prompted by the accessibility offered by new investment apps.

These younger investors may have the lowest levels of financial resilience making them more vulnerable to investment loss. Research showed that a significant loss could have a fundamental lifestyle impact on 59% of self-directed investors with less than 3 years’ experience, who are more likely to own high risk investment products, compared with 38% of investors with greater than 3 years’ experience.

Tackling harm in the consumer investment market is a priority for the FCA. The FCA commissioned BritainThinks to conduct in-depth research into self-directed investors’ behaviours, attitudes and financial resilience. Together with feedback from its Call for Input on the consumer investment market, this research will underpin the FCA’s work in the consumer investment market. In particular, the research will help design a new campaign to address the harm caused from consumers investing in high risk, high return, illiquid investments that may not be suitable for their needs.

Alongside the publication of this research, the FCA has today launched its digital disruption campaign to prevent investment harm. The campaign uses online advertising to disrupt investors’ journeys and drive them to the high return investments webpage – which covers key questions consumers should ask before investing.

The FCA advises consumers to consider five important questions before they invest: 

  1. Am I comfortable with the level of risk?
  2. Do I fully understand the investment being offered to me?
  3. Am I protected if things go wrong?
  4. Are my investments regulated?
  5. Should I get financial advice?

The FCA has recently published work to tackle consumer harm in the investment market including banning the mass-marketing of speculative mini-bonds and will set out its further plans later this year. The regulator also published a warning to consumers on the dangers of investments advertising high returns based on cryptoassets.

Bordier & Cie SCmA to offer cryptocurrencies to their customers* via Sygnum’s all-in-one B2B banking platform

Bordier & Cie SCmA, a leading Swiss private bank founded in 1844, has expanded its offering to include cryptocurrencies by incorporating Sygnum’s B2B banking platform. This partnership enables Bordier’s clients* to invest today in the digital asset economy with complete trust, and lays the foundation for a broader offering of regulated digital asset products and services, including sophisticated trading strategies with options, and the ability to invest in previously hard-to-access asset classes via tokenization.

  • Bordier clients can now securely buy, hold and trade cryptocurrencies such as Bitcoin, Ethereum, Bitcoin Cash and Tezos, and gain diversified exposure via Sygnum’s suite of digital asset management products.
  • Total market capitalisation of cryptocurrencies increased almost four-fold in 2020, making it the best-performing asset class and a powerful tool for portfolio diversification – thus also increasing client-demand.
  • In under 60 days, Bordier & Cie was able to fully integrate Sygnum’s B2B banking platform and offer seamless access to digital assets to their own clients.

Driven by increasing client demand, Bordier has expanded its private banking services to include digital assets through a partnership with Sygnum Bank, leveraging the latter’s B2B banking platform. Sygnum’s all-in-one digital asset solution is seamlessly integrated with Bordier’s existing infrastructure. At this stage, clients* of Bordier can now buy, hold, and trade cryptocurrencies on an execution only basis. They can trade Bitcoin, Ethereum, Bitcoin Cash and Tezos, with the highest level of security and compliance provided by a Swiss regulated bank. The offering will be extended as clients become more at ease with the simplicity of the new service.

Investment diversification via cryptocurrencies has gained significant momentum

Cryptocurrencies have gained significant momentum in the past year, with total market capitalisation increasing almost fourfold to reach USD 1 trillion – making it the best-performing asset class in 2020. In a portfolio context, cryptocurrencies’ high-growth and low-correlation to traditional assets makes them a powerful tool to enhance diversification and achieve superior risk-adjusted returns. Bitcoin, in particular, which many see as the new “digital gold” due to its ability to hedge against inflationary pressure, has seen strong institutional adoption as an alternative investment.

Evrard Bordier, Bordier & Cie’s SCmA Managing Partner, says “We have seen increasing demand from our clients to diversify into alternative asset classes such as digital assets. By partnering with Sygnum Bank, we are providing our clients* with a one-stop, integrated solution while empowering them to invest in this new, high growth asset class with complete trust.”

Sygnum’s all-in-one, the integrated solution delivered quickly

Sygnum’s B2B banking platform is an integrated digital asset solution encompassing not only the technical infrastructure but also compliance as a service, research, and sales education as well as access to a broad range of digital asset products. With seamless integration and a modular set-up, Bordier was able to design, customise and implement their own secure digital asset offering with a short time to market of less than 60 days.

In this partnership, Sygnum provided the digital asset specialist expertise and an all-in-one, market-ready B2B banking platform which includes the safekeeping of private keys, selection of and connectivity to liquidity providers, digital asset AML, and transaction monitoring. Bordier & Cie will continue to manage its client* relationships, and clients* will be able to access Sygnum’s suite of digital asset management products. This new integration is aimed at simplifying the transactional process for clients, providing them with the option to invest in the asset class at their own convenience, and eliminating the need for multiple channels.

“Bordier continues its 177-year tradition of safeguarding clients’ wealth for future generations by offering the ‘next generation’ of assets to its clients*. Bordier’s timeless values and Sygnum Bank’s vision for Future Finance is a powerful combination in the changing financial landscape,” adds Mathias Imbach, Sygnum Bank’s Group CEO.

* “execution only” clients

BNY Mellon Forms New Digital Assets Unit to Build Industry’s First Multi-Asset Digital Platform

New, innovative initiative will help accelerate the development of enterprise solutions to service the rapidly evolving digital asset space

BNY Mellon today announced the formation of a new enterprise Digital Assets unit that will accelerate the development of solutions and capabilities to help clients address growing and evolving needs related to the growth of digital assets, including cryptocurrencies. The cross-functional, cross-business team, which will be led by Mike Demissie, head of Advanced Solutions at BNY Mellon, is currently developing a client-facing prototype that is designed to be the industry’s first multi-asset digital custody and administration platform for traditional and digital assets.

“BNY Mellon is proud to be the first global bank to announce plans to provide an integrated service for digital assets,” said Roman Regelman, CEO of Asset Servicing and Head of Digital at BNY Mellon. “Growing client demand for digital assets, maturity of advanced solutions, and improving regulatory clarity present a tremendous opportunity for us to extend our current service offerings to this emerging field. Pending further evaluations and approvals, we expect to begin offering these innovative and industry-shaping capabilities later this year.”  

“The Digital Assets unit plans to deliver a secure infrastructure for transferring, safekeeping and issuing digital assets,” said Demissie. “Consistent with our open-architecture approach, the unit will leverage BNY Mellon’s digital expertise and leading technologies from fintechs and other collaborators to speed up product development and help our clients tap into the best available solutions in the market.”

The Digital Asset unit will build on BNY Mellon’s digital savvy and strong expertise in investment services and investment management. By leveraging advanced solutions such as blockchain, the technology behind digital assets, BNY Mellon will improve custody and other investment services.

“Enabling the use of digital assets is critical to transforming the future of custody,” said Caroline Butler, head of Custody at BNY Mellon. “Building the bridge between the traditional and digital spaces will create a front-to-back ecosystem for innovation. Our digital asset capabilities should help evolve the way the financial industry operates, including custody, collateral management, issuance, investment management and other segments where BNY Mellon is a key service provider.” 

Standard Chartered and Northern Trust partner to launch Zodia, a cryptocurrency custodian for institutional investors

SC Ventures, the innovation and ventures unit of Standard Chartered, and Northern Trust, a leading provider of asset servicing, have entered into an agreement to launch Zodia Custody, an institutional-grade custody solution for cryptocurrencies.

Cryptocurrencies already represent 0.3% of the world’s currency and bank deposits and are forecast to continue growing with a CAGR of 32% from 2019 to 2024[1]. While there is increasing interest from institutional investors, they account for only 9% of investments in cryptocurrencies at present.

Zodia is designed to enable institutions to invest in the emerging cryptocurrency assets that are transforming how financial markets operate, including transaction and settlement activities. Under the agreement, which is subject to registration with the UK Financial Conduct Authority (FCA), all applicable regulatory filings and customary closing conditions, Zodia is expected to begin operations in London in 2021.

Zodia combines the traditional custody principles and expertise of a bank with the agility of a fintech company to provide an infrastructure that meets the high standards and expectations of institutional investors through a platform that adapts to the changing needs of clients and the market.

At launch, pending regulatory approval, Zodia will provide custody services for the most-traded cryptocurrency assets – Bitcoin, Ethereum, followed by XRP, Litecoin, and Bitcoin Cash – which represent the majority of client demand and activity, accounting for approximately 80% of the total assets [equivalent to USD395B] traded on the top cryptocurrency exchanges.

Maxime De Guillebon, Chief Executive Officer of Zodia, said: “Zodia was established to address the need for a cryptocurrency custodian that truly understands custody. We combine the risk management, compliance, governance and security approach of a regulated financial institution with the cutting-edge innovation of crypto asset and key management technologies. By doing so, we enable operational efficiency and speed of transaction without compromising on security or reliability.”

Alex Manson of SC Ventures, said: “The launch of Zodia demonstrates our commitment to rewiring the DNA in banking. Drawing on Standard Chartered’s heritage of providing custody services to institutional clients for 160 years, Zodia’s mission is to be a ‘force for good’ by lifting industry standards for digital assets in a sustainable, safe and responsible way.”

Pete Cherecwich, President, Corporate & Institutional Services, Northern Trust, said, “The introduction of digital custody backed by the know-how and experience of global banks is a breakthrough in the evolution and support of institutional cryptocurrency markets. Zodia’s robust capabilities will make it possible for institutional asset owners, family offices and asset managers to invest in a range of cryptocurrencies as interest continues to grow in these emerging and innovative financial instruments.”

Zodia further establishes Standard Chartered and Northern Trust as leaders in the development of digital-asset infrastructure. Alongside its partnerships with blockchain service providers, Standard Chartered has invested in core technology provider Metaco and is collaborating with the Bank of Thailand and the Hong Kong Monetary Authority to explore distributed ledger interoperability for cross-border fund transfers.

Northern Trust has a record of focused investment in digital innovation, having launched the industry’s first deployment of blockchain technology for the private equity market in 2017. Working with key clients and regulators, Northern Trust continued to develop and implement additional capabilities on its blockchain and collaborated with Broadridge to make the technology available to all market participants. In 2020, Northern Trust and BondEvalue partnered to complete the first trade of a fractionalized blockchain-based bond, working in cooperation with the Monetary Authority of Singapore.

Zodia Custody is in the process of registering with the FCA under UK Money Laundering Regulations and will apply standards that are equivalent to the custody of traditional securities.

Blockchain, Stablecoins and Gold

Blockchain Technology in the last years aims, among others, to create a new and safe payments system for global transactions that will be fast, secure, cheap, transparent, and decentralized. For that, it’s going to use cryptocurrencies.

The value of most cryptocurrencies, like Litecoin and Bitcoin, fluctuates daily, and while the digital currencies aim to facilitate safer transactions, their values depends increasingly on speculation.

The first wave of crypto assets has failed to provide a reliable and attractive medium of exchangeand/or store of value. Crypto coins suffer from high volatility, limits to scalability, complicated user interfaces and issues in accounting, governance and regulation. Crypto assets have served more as a speculative asset class for traders-speculators and those engaged in illegal activities rather than as a means to facilitate global transactions and payments. Today, new stablecoins have many of the features of more traditional cryptocurrencies but aim to stabilise the price of the crypto coin by linking its value to that of an underlying asset or a commodity.

Stablecoins are increasingly gaining traction as their values are pegged to other assets such as the USD, gold, oil or silver. Stablecoins aim to mimic the same functionality of fiat currencies. A stablecoin is a crypto currency that is pegged to and/or backed by an underlying asset.

Stablecoins enjoy the benefits of a cryptocurrency (security, transparency, privacy, etc.) without the extreme volatility that comes with most of them.

In the last months there has been a “stablecoin invasion.” Numerous stablecoins have been released or are in development all over the world.

Most of the stablecoins are pegged at a 1:1 ratio with fiat currencies, such as the USD or the Euro, which can be traded on forex. Other stablecoins can be backed to other kinds of assets, such as commodities like gold, or even by other cryptocurrencies like bitcoin.

Commodity-backed stablecoins are backed by other kinds of assets, among others gold, silver or other precious metals. Gold is the most common commodity to be collateralized.  Investors and users of precious metals-backed stablecoins essentially hold a tangible asset that has real tangible value. Precious metals have the potential to appreciate in value over time, which gives increased incentive for investors to hold and use these stablecoins.

Blockchain technology now has established itself as a secure accounting method, and with BTC becoming well known to global investors, a new era of gold-backed cryptocurrency is emerging, even countries are looking to issue their own gold-based cryptocurrency.

A coin is issued that represents a certain quantity of gold (e.g. 1 gram of gold equals 1 coin)so that at a minimum the price of the stablecoin will always equal the current gold price. The gold is stored in a safe location by a trusted custodian, and can be traded on exchanges with other cryptocurrencies.

An example of stablecoins backed by precious metals are KAU (Gold Currency) and KAG (Silver Currency) which are the primary currencies of Kinesis. On Kinesis Gold Stablecoins you can find a presentation of Kinesis, a list of articles and other materials about this project, which is evolving into a whole monetary system.

When evaluating gold-backed stablecoins look atthe legal framework concerning ownership and storage of the gold: it is important to make sure that you own the physical gold.

There are also stablecoins backed by other cryptocurrencies. This allows the stablecoins to be much more decentralized than their fiat-backed counterparts, since everything is conducted on the blockchain.

Finally, there are also non-collateralized stablecoins that are not backed by anything, which might seem contradictory given what stablecoins are. These types of coins use an algorithm to control the stablecoin supply.

What is An Initial Coin Offering (ICO’s)

An Initial Coin Offering (ICO) is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks. In an ICO campaign, a percentage of the cryptocurrency is sold to early backers of the project in exchange for legal tender or other cryptocurrencies, but usually for Bitcoin.

Initial Coin Offering means that someone offers investors some units of a new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin or Ethereum. Since 2013 ICOs are often used to fund the development of new cryptocurrencies. The pre-created token can be easily sold and traded on all cryptocurrency exchanges if there is demand for them.

Many view ICO projects as unregulated securities that allow founders to raise an unjustified amount of capital, while others argue it is an innovation in the traditional venture-funding model.

Several projects used a crowdsale model to try and fund their development work in 2013. Ripple pre-mined 1 billion XRP tokens and sold them to willing investors in exchange for fiat currencies or bitcoin. Ethereum raised a little over $18 million in early 2014 — the largest ICO ever completed at that time.